Profit Benchmarks
What is a good restaurant profit margin?
Direct answer
A good restaurant net profit margin is usually 3% to 9%. Full-service restaurants often land near 3% to 6%, while quick-service, delivery-light, bar-heavy, or very efficient concepts can reach the high single digits or better.
Key points
- Net margin matters more than gross margin because it includes labor, rent, utilities, card fees, and overhead.
- A restaurant can look busy and still lose money if food cost and labor move up together.
- The fastest first check is prime cost: food, beverage, and labor as a share of sales.
What to do next
- 1Calculate weekly food and beverage cost as a percentage of sales.
- 2Calculate labor cost as a percentage of sales, including payroll tax and benefits.
- 3Compare prime cost against your target, then review the low-margin, high-volume menu items first.